Plans Scuttled to Build a 135-room Hotel and
Conference Center near
Atlantic City International Airport in New Jersey
South Jersey Transportation Authority Cancels its Contract
with Argus Real Estate Development

Jan. 11, 2013--Plans to build a 135-room hotel and conference
center near Atlantic City International Airport have fizzled -- at
least temporarily.

The South Jersey Transportation Authority has canceled its
contract with Argus Real Estate Development LLC, a Ventnor-based firm
awarded the work in 2009 following a proposal process and more than two
years of negotiations.

The authority cited performance concerns, including the firm's
failure to obtain building permits within the three-year window in its
contract, according to documents obtained by The Press of Atlantic City
through an Open Public Records Act request.

Argus' concept called for hotel rooms, extended-stay suites,
6,000 square feet of conference space, 22,000 square feet of retail
space and a restaurant on a 13.5-acre site bordered by Tilton and
Delilah roads in Egg Harbor Township.

"You are hereby notified that the authority immediately
terminates the agreement in its entirety," the SJTA's attorneys state
in an Aug. 9 letter to Argus Real Estate Development. "The authority
also notifies Argus that it hereby reserves all of its rights to seek
all available remedies relative to Argus' neglect, failure to perform,
and observe the terms, conditions or covenants of the agreement between
the parties."

The project would have been a first for Argus, a new firm that
acquired its business certificate in 2007, two months before the hotel
proposal was submitted to the SJTA. The local firm headed by five new
partners beat out Michigan-based Acquest Development Inc., a firm
specializing in hotel and conference center development and the
developer of the Trenton Marriott at Lafayette Yard, for the the work.
Acquest proposed building a 148-room Hilton Garden Inn and Conference
Center at the Egg Harbor Township site.

Documents show the SJTA began sending letters to the firm
noting concern over "the apparent lack of progress" in March. Formal
responses from Argus were never received and the contract was canceled,
according to the letters. The terms of the contract gave Argus' firm
until this month to obtain the permits, but the SJTA began sending the
letters after two years and three months passed without progress.

Argus' firm was expected to finance construction of the
project originally slated to begin last year.

When asked about the contract cancellation, managing partner
Lester Argus, who also owns the property management firm Argus Real
Estate, said the project was simply in a holding pattern. He said the
permits and financing were never obtained due to problems with traffic
flow at the reconfigured Airport Circle and the SJTA's plans for a
direct connector road from the Atlantic City Expressway to the airport
that would bypass the hotel and complicate access to the property.

"There's no one that would build a hotel on that piece of
property," Argus said. "SJTA couldn't do anything with that property,
and neither could we."

Argus Real Estate Development is run by five partners: Argus,
certified public accountant Terrence Mooney, of Absecon, ophthamologist
Brett Foxman, of Margate, attorney John Scott Abbott, of Margate, and
dentist Alan Levine, of Chadds Ford, Pa., according to the firm's hotel
proposal. The firm does not have any other current projects, Argus
said.

Kevin Rehmann, a spokesman for the SJTA, said he couldn't
address specific questions about why Argus was selected but said the
firm was deemed the most responsible respondent at the time. The SJTA
plans to start a new request for proposal process for a hotel in the
future, but whether that proposal will be for the same site or a new
one is yet to be seen.

"Whatever site we want the development on would have to be
stated in the RFP," Rehmann said. "The hotel is obviously something we
need."

The hotel plans were designed at a time when the nearby casino
industry was flourishing and the airport saw an opportunity for growth.
Aside from plans to garner additional carriers for the airport, which
is currently served by a single carrier, Spirit Airlines, the planned
NextGen Aviation Research and Technology Park appeared to be imminent.

The announcement of plans to build the hotel followed the
announcement of the planned seven-building technology park located on
the Federal Aviation Administration's campus. By December 2010, a
separate proposal for what was called the NextGen Aviation Center for
Excellence at the Atlantic City Race Course in Hamilton Township was
announced, also with a hotel and office space, but that plan was never
developed.

Argus, however, said his firm's plans were never dependent on
business from the park, which has yet to break ground more than six
years after it was announced.

One federal official said there's a need for the SJTA's hotel
and conference center regardless of the timeline for developing the
NextGen park.

Wilson Felder, the recently retired director of the FAA's
William J. Hughes Technical Center, named the project as one of the top
priorities he'd like to see accomplished in an interview with The Press
reflecting on his time at the center. Despite the fact that the
contract for the project was awarded three years ago, Felder said the
project remains in the early discussion stages with much community
interest.

"It's increasingly difficult for the FAA to hold conferences
in gambling venues in Atlantic City. We're constrained in what we can
do," Felder said. "What I've said is that it's not our fault that we're
located here and those are our options. Getting a nearby conference
facility in place would allow us to more easily do those things."

The FAA owns the land used for Atlantic City International
Airport and leases the space to the SJTA. The administration also owns
the parcel where the hotel and conference center would have been
located. The site already has clearance for a hotel from the New Jersey
Pinelands Commission.